The billing clerk of a Montgomery County day-care center has pleaded guilty to Medicaid fraud in a scheme prosecutors say was so blatant that administrators at the center joked about going to prison together.
The clerk, Jane Margolius of Silver Spring, entered the guilty plea to Medicaid fraud yesterday in Baltimore Circuit Court. Margolius has agreed to cooperate with the attorney general's office, which is investigating fraud at her former employer, the Oak Leaf Center in Bethesda.
Much of the $1.6 million the center billed the state Medicaid program for juvenile psychiatric services between 1986 and May 1990 may have been improper, said Carolyn J. McElroy, an assistant attorney general prosecuting the case. In some cases, the center billed the state for services that had not taken place, including billings for services on days the center had been closed.
And in general, Oak Leaf Center officials billed the state for therapy even though a supervising psychiatrist was not present, as required by Medicaid rules, McElroy said.
The attorney general's office said state investigators seized a series of in-house memorandum named the "Pocono News," a reference to the federal prison in Allenwood, Pa., in which Margolius discussed the alleged fraud with one of the co-owners of Oak Leaf, Keith Wagner.
Margolius allegedly wrote in one memo, "I figured out that the Oak Leaf Center is going to have a new location -- Danbury Prison. I would say three quarters of our staff is [are] making up notes -- just a tad bit illegal, eh? At least we will be there all together."
In another memo, Margolius suggested billing the state for treatment supposedly given on Memorial Day or on Sundays. Wagner, in response, wrote, "No, I don't want to push a good thing too far," the attorney general's office said.
Wagner, along with co-owner Lynn Chertkov and other employees at Oak Leaf are still under investigation, the attorney general's office said. Margolius must cooperate in the investigation before she is sentenced. Medicaid fraud carries a maximum punishment of five years in prison and a $10,000 fine.
Wagner's attorney, Paul Kemp of Rockville, declined comment on the investigation.
Ken West, who represents Chertkov, said she was not involved in billing the state. Oak Leaf Center, West said, "was a unique and rather special organization in that it was created to provide treatment to probably the least fortunate children among us."
"You're not talking about a facility operated by doctors who are making huge profits," West said. "Nobody was making any money out of this."